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The petrol price was hiked on Wednesday by a record Rs 7.54 per litre as rupee had a free fall, an unpopular decision that was attacked by allies of UPA government who demanded its immediate rollback holding it as unacceptable.

The hike, the third in one year, came a day after end of the Budget session of Parliament and Indian Prime Minister Manmohan Singh speaking of the need to take "difficult decisions" on the third anniversary of UPA-II.

The decision of the oil marketing companies effective from Wednesday night is the steepest hike in petrol price ever, the previous increase being Rs 5 per litre.

Petrol price in Delhi has been hiked by Rs 7.54 per litre to Rs 73.18 a litre. In Mumbai it will cost Rs 78.57 per litre as against Rs 70.66 a litre. In Kolkata, Rs 77.88 per litre and Chennai Rs 77.53 a litre.

Oil firms had twice raised rates by Rs 5 per litre - on May 15, 2011 when prices in Delhi were hiked from Rs 58.37 a litre to Rs 63.37 per litre and on May 24, 2008 when rates were raised to Rs 50.56 a litre.

The hike came under all round attack from political parties but significantly DMK, which is part of the government, sought its rollback.

Samajwadi Party, whose leader Mulayam Singh was the centre of attention at the UPA anniversary celebrations last night, also attacked the decision and demanded rollback.

"I will ask for it," was DMK President M Karunanidhi's terse reply when reporters in Chennai wanted to know whether he will demand a rollback.

TMC Chief and West Bengal Chief Minister Mamata Banerjee, who had on earlier occasions threatened withdrawal of support on the issue of fuel price hike, reacted on Wednesday saying, "the increase is unjust and unilateral".

Indian Finance Minister Pranab Mukherjee maintained that the decision was taken by oil companies as petrol is a deregulated commodity.

The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14.5 per cent and 3.2 per cent fall in value of rupee against the US dollar.

On Tuesday, Oil Minister S Jaipal Reddy had stated that the depreciation in rupee had necessitated an immediate increase in fuel prices.

But rates of diesel, kerosene and cooking gas have not been revised as a high-power ministerial panel headed by Finance Minister Pranab Mukherjee and having representatives of key UPA allies like TMC and DMK, hasn't met for almost a year now.

Price of diesel, kerosene and cooking gas were last raised in June last year.

However, Banerjee said her party would not topple the government like the CPM as it would create economic and political instability in the country.

"We cannot accept the price hike burden on the people," she said asking why there was no consultation on the issue.

BJP and other opposition parties including the Left called it "unreasonable" and a big burden on the common and threatened agitation against it.

Terming the steep hike in petrol price as "unreasonable", BJP spokesperson Prakash Javadekar said, "We condemn the petrol price hike and seek its rollback. We will not allow it to happen. A strong democratic agitation is on the cards".

"It is a cruel blow on people who are already suffering from severe price rise. The Left parties have called upon all party units to immediately organise powerful protest actions," CPI-M General Secretary Prakash Karat told PTI.

"If rupee depreciates by one against the US dollar, our oil companies lose Rs 8,000 crore (annually)," Reddy had said on Tuesday. "Rupee yesterday dipped (to an all-time low of) Rs 55 (to a US dollar). Last year it was Rs 46. This translates into a loss of Rs 72,000 crore (on account of rupee depreciation) this year."

State-owned oil firms, which had in the fiscal ending March 31, 2012 lost Rs 4,860 crore on petrol sales, were currently losing Rs 6.28 per litre on petrol. After including 20 per cent VAT, the desired increase in petrol price in Delhi came to Rs 7.54 a litre.

The losses on petrol are besides Rs 512 crore per day that oil firms lose on selling diesel, domestic LPG and kerosene. Diesel is currently sold at a loss of Rs 15.35 a litre, kerosene at Rs 32.98 per litre loss and oil firms lose Rs 479 on sale of every 14.2-kg domestic LPG cylinder.

The three firms had together lost Rs 138,541 crore in revenue in 2011-12. This year they are projected to lose a record Rs 193,880 crore.

During 2011-12, petrol prices were revised five times in order to bring domestic prices in line with prices in the international market. Of these, rates were hiked on three occasions and lowered on two other. The last revision in rates on December 1 was a reduction of Rs 0.78 per litre to Rs 65.64 a litre.

"Thereafter, due to domestic market conditions, it has not been possible to change selling price of petrol in line with international prices," Indian Oil Corp (IOC), the largest oil retailing firm in the country, said in a statement.

IOC along with Bharat Petroleum and Hindustan Petroleum lost Rs 4,651 crore in revenue since the last revision.